Three Structural Issues Holding Back The Housing Recovery

Here are some interesting stats courtesy of Jon Maddux, CEO
of You
Walk Away.

State

% of You Walk Away Clients With No Foreclosure Notice

Average Months Without Foreclosure Notice

Washington

79%

13

Nevada

79%

13

Georgia

75%

12

Michigan

73%

18

Virginia

72%

18

Oregon

69%

13

Pennsylvania

66%

12

Hawaii

60%

21

California

59%

15

New York

57%

16

New Jersey

53%

14

Arizona

52%

14

Colorado

52%

8

Florida

45%

17

Ohio

37%

19

Says Maddux

In Florida, 45% of our clients are in pre-foreclosure
status. On average, these Florida homeowners are 17 months
delinquent and have yet to receive even their first formal
foreclosure notice. 59% of our California clients are in
pre-foreclosure status. These California borrowers are an average
of 15 months delinquent and also have yet to receive their first
formal foreclosure notice. Eighty-five percent of the homeowners
we’re working with are in pre-foreclosure and have not made a
mortgage payment for an average of 14 months.

Structural Issues

Kids graduating from college are deep in debt and holding off
home buying, getting married, and starting families.

Boomers looking to retire and downsize have few candidates
able and willing to buy larger homes, even with deep discounts

Shadow inventory and the pent-up foreclosure list are huge
forces in play.

Maddux believes the data points to significant backlog,
eventual foreclosure activity and a drop in value for home
prices.

I think home prices are bottoming in many areas, but even
if so, prices in general are not going anywhere fast because of
aforementioned structural issues.

Addendum

Questions came up regarding the size of the
sample.

You Walk Away has 7,000 clients.

Is that a representative enough sample?

I do not know. It is certainly not scientific sampling.
However, I suspect it is at least reasonable.

From Maddux ...

Information Regarding Our Methodology:

YouWalkAway.com has worked with over 7000 clients nationwide. One
part of the service includes monitoring their foreclosure and
providing weekly updates and a personalized foreclosure timeline.
Once enrolled, we begin by asking each client when was the date
of their last mortgage payment and weekly research each client’s
property to determine if a foreclosure start notice has been
filed. We then continue to monitor every property and record each
milestone of the foreclosure process until the home goes back to
the bank or is sold in a short sale.

The data was compiled using our current client database we
compiled lists of the number of active clients in every state and
compared the number of borrowers who had received their
foreclosure start notice and those who have defaulted, but not
yet received the foreclosure start notice. This was done to see
what percentage of our clients had defaulted, but were not yet in
the formal foreclosure process. After realizing that the numbers
were higher than expected, especially in light of recent news
indicating that lenders had picked up the pace as a result of the
$26 billion mortgage settlement, we decided to see how many
months delinquent on average these “pre-foreclosure” borrowers
were. Again, the numbers came back much higher than expected.
This indicates that, while there may have been a recent uptick in
foreclosure filings, lenders are still dealing with years of
backlog.